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Asian Markets Fall On Renewed Worries About Trade Tensions

asian market down 02dec19 lt

Asian stock markets are lower on Tuesday on renewed worries about global trade tensions after U.S. President Donald Trump announced plans to reinstate tariffs on metal imports from Brazil and Argentina. Weak U.S. manufacturing data also dampened sentiment.

The Australian stock market is notably lower following the negative cues from Wall Street. Investors turned cautious ahead of the Reserve Bank of Australia's monetary policy decision due later today.

The benchmark S&P/ASX 200 Index is losing 132.30 points or 1.93 percent to 6,730.00, while the broader All Ordinaries Index is lower by 129.50 points or 1.86 percent to 6,835.80.

The major miners are notably lower. Fortescue Metals is losing 2 percent, while BHP and Rio Tinto are declining almost 2 percent each.

Among gold miners, Newcrest Mining is lower by almost 4 percent and Evolution Mining is lower by almost 2 percent.

The big four banks are also weak. Commonwealth Bank, Westpac, ANZ Banking and National Australia Bank are declining in a range of 1.1 percent to 1.4 percent.

Oil stocks are declining even as crude oil prices rose overnight. Oil Search is losing more than 2 percent, Woodside Petroleum is lower by more than 1 percent and Santos is down 0.4 percent.

Santos has raised its 2025 production outlook to 120 million barrels of oil equivalent from 100 mmboe earlier.

Caltex Australia said that an A$8.6 billion unsolicited takeover bid it received from Canadian convenience store operator Alimentation Couchce-Tard undervalues the company. The fuel importer and retailer's shares are lower by almost 1 percent.

Metcash said it will record a A$237.4 million write-down against its major food division, just days after it disclosed that 7-Eleven would not be renewing its supply contract when it expires in August. The food and beverage wholesaler's shares are declining more than 2 percent.

Treasury Wine Estates said it has appointed the former chief financial officer of Aristocrat Leisure, Toni Korsanos, as an independent non-executive director. However, the company's shares are losing almost 4 percent.

In economic news, the Reserve Bank of Australia will wrap up its monetary policy meeting and then announce its decision on interest rates today. The central bank is widely expected to keep its benchmark lending rate unchanged at the record low 0.75 percent.

Australia also will see third-quarter figures for its current account today.

In the currency market, the Australian dollar is slightly higher against the U.S. dollar on Tuesday. The local currency was quoted at $0.6817, up from $0.6775 on Monday.

The Japanese market is declining and the safe-haven yen strengthened following the weak cues from Wall Street and on renewed fears about global trade tensions.

The benchmark Nikkei 225 Index is losing 168.51 points or 0.72 percent to 23,360.99, after touching a low of 23,186.84 earlier. Japanese shares rallied to reach their highest level in nearly 14 months on Monday.

Market heavyweight SoftBank Group is lower by more than 2 percent and Fast Retailing is down 0.3 percent.

The major exporters are mostly lower on a stronger yen. Mitsubishi Electric is lower by more than 1 percent, while Panasonic is declining 0.5 percent and Canon is down 0.2 percent. Sony is adding 0.5 percent.

In the tech space, Tokyo Electron is declining 0.5 percent and Advantest is losing almost 1 percent. Among auto stocks, Honda Motor is lower by 0.6 percent and Toyota Motor is losing 0.7 percent.

In the oil sector, Inpex is advancing almost 1 percent, while Japan Petroleum is down 0.1 percent.

Astellas Pharma said it has agreed to acquire Audentes Therapeutics Inc. for $60.00 per share in cash in a deal representing a total equity value of about $3 billion. However, shares of Astellas Pharma are lower by more than 1 percent.

Among the major gainers, Nomura Holdings is advancing almost 2 percent.

On the flip side, Sompo Holdings is losing more than 3 percent and Taiyo Yuden is lower by almost 3 percent. Okuma Corp., Eisai Co., Nisshin Seifun and Kikkoman Corp. are all lower by more than 2 perent each.

On the economic front, Japan will provide November numbers for monetary base today.

In the currency market, the U.S. dollar is trading in the lower 109 yen-range on Tuesday.

Elsewhere in Asia, Shanghai, South Korea, Singapore, New Zealand, Indonesia, Malaysia, Hong Kong are also lower. Bucking the trend, Taiwan is modestly higher.

On Wall Street, stocks closed lower on Monday as disappointing U.S. economic news offset earlier positive sentiment generated by some upbeat Chinese manufacturing data. A report from the Institute for Supply Management showed a continued contraction in U.S. manufacturing activity in the month of November, while a separate report released by the Commerce Department showed an unexpected decrease in U.S. construction spending in the month of October. Traders were also reacting to President Donald Trump announcing plans to reinstate tariffs on metal imports from Brazil and Argentina.

The Dow ended the day just off its lows of the session, down 268.37 points or 1 percent at 27,783.04, while the Nasdaq tumbled 97.48 points or 1.1 percent to 8,567.99, and the S&P 500 slumped 27.11 points or 0.9 percent to 3,113.87.

The major European markets moved sharply lower on Monday. While the U.K.'s FTSE 100 Index slid by 0.8 percent, the French CAC 40 Index and the German DAX Index tumbled by 2 percent and 2.1 percent, respectively.

Crude oil prices regained some ground on Monday amid reports Saudi Arabia wants OPEC to deepen oil production cuts in order to anchor oil prices before Saudi Aramco's initial public offering. WTI crude oil for February delivery climbed $0.79 or 1.4 percent to $55.96 a barrel.

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